CIT Bank has agreed to buy Direct Capital in Portsmouth, N.H., in an effort to expand in lending to small and midsize businesses.
The bank is the U.S. commercial subsidiary of the $48.6 billion-asset CIT Group (CIT) in Livingston, N.J.
Direct Capital had assets of about $500 million as of March 31. It has provided more than $2.25 billion in equipment, franchise and vendor financing to 80,000 small and midsize customers over the last 20 years, the companies said in a release Tuesday.
"Direct Capital's proprietary online lending platform, LendEdge, will complement our existing small-business and mid-market customer offerings as we continue to provide financing to these important sectors of the U.S. economy," Nelson Chair, the chief executive of CIT Bank, said in the release.
The price of the deal, which is expected to be completed in the third quarter, was not disclosed.
Christopher Broom, the co-founder and chairman of Direct Capital, and CEO James Broom will continue leading the business after the deal closes.
Though CIT faces added oversight and rules from federal regulators if it surpasses the $50 billion-asset threshold, Chairman and Chief Executive John Thain said in a speech on Wednesday that the company is "prepared to be a [systematically important financial institution] if the right deal came along," according to The Wall Street Journal.